Allogene Therapeutics, Inc. (ALLO) Earnings Call Transcript & Summary

Good afternoon. Thanks for joining us for another session at the 43rd JPMorgan Healthcare Conference. I'm Brian Cheng. I'm one of the senior biotech analysts here at the firm. I'm joined by my associates Sean Kim and Meriam Waggeh, who are also in the audience. On stage, we have Allogene Therapeutics. I'll now pass the mic to their CEO, David Chang, for a short presentation followed by a live-audience Q&A. David, the stage is yours.

Thanks, Brian. Thanks for the introduction, and thanks for hosting Allogene as we kick off 2025. My name is David Chang. I'm co-founder and CEO of Allogene, which was created with a singular mission of advancing CAR T therapy to what it is now, which is autologous-based treatment to allogeneic off-the-shelf products so that this potentially life-saving therapy can be available to all those patients in need. What we have been doing over -- since the founding of the company is really putting together our knowledge of CAR T coming from our experiences of advancing autologous CAR T products as well as a growing data set that we have generated with allogeneic CAR T products, and also combining that with the science to come up with the products that could be the best-in-class for each of the indications that we are pursuing. Excuse me. So this study really summarizes, in terms of the pipeline, that we are advancing in hematologic malignancy indication as well as in solid tumor. And we also have a product that is soon to be introduced into the clinics. This is ALLO-329 going into the autoimmune disorder indications. Each of these assets comes with a unique differentiating attributes. cema-cel is currently in a pivotal Phase II study in a first-line consolidation setting to maximize the curative potential of CD19 CAR by targeting patients with a minimum residual positive disease. And this is really to with the goal of improving the cure rate in the large B-cell lymphoma. ALLO-316 is being studied in solid tumor, which still remains as one of the [ elusive ] indications despite the great unmet medical need, as CAR T therapy so far has not been so successful. As an allogeneic CAR T, we are beginning to see early signs of efficacy as well as durability. And we believe that this is driven by the Dagger technology that's intrinsic to CD70 CAR, which is part of the ALLO-316. And combining these knowledge together, we have designed ALLO-329 specifically with the autoimmune indications in mind. And we believe that this product has very unique attributes that addresses the fundamental biology of autoimmune disorders and become the best-in-class product as we expand the program through the autoimmune indications. What all this is bringing together is really the benefits to allogeneic CAR T, scalable manufacturing and off-the-shelf products that can be readily available to those patients in need, that allows the on-time treatment. Logistics, delivery -- logistics are simple, and this is really a standard pharmaceutical delivery model that allows the product not to only be used in the specialized centers, but potentially also be used in the community-based cancer centers. And the way that we are designing the study, especially going into the frontline consolidation with the cema-cel, allows us to leapfrog where other autologous CAR T products are currently being marketed in the third- and the second-line setting. And lastly, as we sort of expand indications into the frontline consolidation as well as autoimmune, it really creates an opportunity for us to continue to develop and expand the potential indications that we are pursuing with these 3 assets. Another thing that I want to point out, and this is something we have been saying and others in the field are saying, in the cell and gene therapy space, manufacturing process is the product. This is something that we have taken to the heart, and invested early on, developing the internal capability for the process development and manufacturing of the product, not only the capability but also the manufacturing facility that comes with the capacity of producing enough materials to treat upwards -- up to 60,000 plus patients on an annualized basis. And this is really highlighting the scalability of the allogeneic CAR T manufacturing as we eye the indications, such as autoimmune disorders. So let me talk a little bit more about the cema-cel program. The strategy behind ALPHA3 study, which is the pivotal study that we have initiated last year, and this study is actively enrolling, is bringing together the right product, cema-cel, that has shown efficacy in the relapsed refractory setting that we believe matches up to what the autologous CD19 CAR T has done to the right patients. So these are the MRD-positive patients at the end of the frontline chemoimmunotherapy for large B-cell lymphoma. We believe these are the patients who are insufficiently treated with R-CHOP-based chemoimmunotherapy and needs additional treatment, and also, at the right time, when their disease volume is at the lowest, which benefits the CAR-T, both in terms of efficacy as well as safety. Now let me talk each components of the right product, right patients and right time more in detail. The efficacy of cema-cel has been extensively investigated in the third-line large B-cell lymphoma setting. Shown here is the response rate, including CR as well as durable CR. With lymphodepletion and cell death that we are moving forward in the frontline consolidation, we have shown the response rate of 67%, complete remission rate of 58% and 42% durable remission as measured by the complete remission at Month 6. When you compare these numbers to the numbers that were generated in -- with the currently approved large CAR T products, autologous CAR T products, KYMRIAH, YESCARTA and BREYANZI, I would argue the numbers matches up to the efficacy that has been demonstrated with the CD19 autologous CAR T products. When it comes to the adverse event profile, numerically, cytokine release syndrome and neurotoxicity appears to look favorable, and also some of the concerns that has been raised about infection risks, especially with the lymphodepletion regimen that we are using, which includes anti-CD52 antibody, Grade 3 infection rate, if anything, trends lower than what has been reported with autologous CAR T products. So we believe we have the right product. Now let's talk about the right patient. This is really where the lymphoma field is going, using the MRD as a -- to assess the disease burden as well as to measure the treatment outcome. What is shown here is outcome of the patients based on their MRD status at the end of frontline chemoimmunotherapy in the R-CHOP-based chemotherapy. On the right panel is progression-free survival, shown by the Kaplan-Meier curve. If you are MRD positive, which is shown in the red line, majority of those patients relapse, and the relapse occurs very quickly with a median time of 4 to 6 months. So these are really the patient population whose need is insufficiently addressed with R-CHOP and requires additional treatment, whereas, if you are MRD negative, you do extremely well. This is shown in the blue line, patients relatively free of the recurrence during the follow-up of up to 3 years. So where we are focusing here, with the understanding that MRD positivity -- those patients who are MRD positive are 12x more likely to relapse, is identifying the patients using the CLARITY assay, which is developed by our diagnostic partner, Foresight Diagnostics, to choose the right patients to treat the patient with a cema-cel. The argument about the right time really is summarized in this study. Study after study with a CAR T have shown that the patients with a low disease volume fare better. Their efficacy looks better, and the safety profile appears to be better. What's shown on the left is the probability curve based on disease burden. When you look at the response, durable response probability, it is higher when the disease volume is lower. On the other hand, when you look at the adverse event profile, specifically the neurotoxicity event, it trends the other way. When the disease volume is lower, they do not experience -- they do not experience any neurotoxicity. Now let's put this in the context of MRD positivity in the frontline consolidation setting. We estimate, based on quantitative measures using the MRD assay, patients who are treated at the MRD positive state, this is essentially when the smoke appears to be -- appearing before fire it becomes evident, they have -- their disease burden is about 200-fold lower. So this is what we mean by applying the right treatment to the right patients at the right time, when their disease burden is the lowest. Another important aspect of the design of the ALPHA3 study is, with all the benefits of the allogeneic CAR T treatment, we are moving the treatment from specialized cell therapy centers, which is where the autologous CAR T therapy is administered, to the community-based cancer centers. The fact cema-cel comes with a very simple logistics without any kind of infrastructure requirement for the administration allows us to easily move into the community-based cancer centers. As we are conducting the ALPHA3 study at this point, more than half the sites that are currently active and enrolling are the community-based cancer centers. Now some details about the ALPHA3 study. This is a randomized study that will compare the outcome of the patients treated with cema-cel to the observation, which is watch and wait, the current standard of care. Initially, patients will be randomized to 3 different arms, 2 arms that contains a cema-cel treatment by using 2 different lymphodepletion regimens, FC and FCA, and a third arm, which is a control arm, watch and wait. Mid this year, 2025, we will carry out the first interim analysis and make a determination on which lymphodepletion to continue, and thereafter study, we'll be randomizing patients 1:1 to cema-cel with a chosen lymphodepletion versus control. We expect to enroll approximately 240 patients. This study is using event-free survival as a primary endpoint, and the key secondary endpoint includes progression-free survival and overall survival and the translational analysis of rate of MRD conversion, meaning how many patients convert to MRD negativity after the cema-cel treatment. The study was initiated in 2024. The first important milestone, and this is significant derisking information that we will generate, is the interim analysis that's planned for mid-2025 where we will select the lymphodepletion regimen. The study will continue, leading to the first interim efficacy analysis of primary endpoint, event-free survival, in the first half of 2026, followed by the primary analysis towards the end of 2026. If the study is positive, this study will be -- program will be moving into potential BLA stage in 2027. So why the study design is so important to maximize the potential of the cema-cel is illustrated in this slide. Currently, second and the third line is where autologous CAR T therapy is approved and marketed. By going after firstline consolidation setting, we are leapfrogging where autologous CAR T therapy is and putting the cema-cel ahead of the currently approved CD19 CAR T products. This comes with the benefit of much larger addressable patient population as well as much greater commercial opportunity. Now looking at the future of cema-cel, the idea of treating patients at the MRD-only stage becomes a very attractive proposition. And the same concept can be applied to other CD19 malignancies, including acute lymphoblastic leukemia, follicular lymphoma, mantle cell lymphoma, as well as other B-cell -- CD19-positive B-cell malignancies. This is a potential future of the cema-cel program, depending the outcome of the first study that we are currently conducting. I'll now move into the second program that we are very excited about. This is ALLO-329. This is a CAR that's targeting dual targets, CD19 and CD70. This product was really designed from the beginning with an autoimmune disease indication as the primary goal. And we optimized every aspect of the CAR, including the targets that we are going into, with the idea of, one, as an allogeneic product, you have to overcome rejection. We believe we have sufficiently addressed that important issue. And also, that allows us to consider potentially lowering and eliminating lymphodepletion requirement, which can greatly increase the use of ALLO-329 in patients with autoimmune disorders. ALLO-329, as I previously alluded to, goes after the fundamental mechanism of autoimmune disorder, not addressing only the CD19 B-cells but also CD70 positive lymphocytes, including CD70 T-cells. And I'll come back to this particular aspect on the next slide. And the real excitement using CAR T for the treatment of autoimmune disorders is, this is really a paradigm-shifting approach to managing autoimmune disorders from chronic lifelong treatment to a onetime CAR T infusion that can provide prolonged drug-free, symptom-free remission. This is really the future that we would like to see as we advance ALLO-329. So the most important thing, what are we exactly doing by targeting CD19 and CD70? What's shown here is CAR T with a CD19 CAR and CD70 CAR. Being able to go after CD19-positive cells will allow us to deplete the B-cells. Being able to go after CD-positive T-cells allow us to overcome immune rejection, and we have clinical data coming out from different program that substantiates this important biology of CD70, which is now a proprietary technology known as Dagger technology that we are using for our allogeneic products that is in development. The other one is that CD70 is an antigen that is upregulated in activated T-cells, dendritic cells and other lymphocytes that contributes to the maturation and activation in B- and T-cells. We believe targeting those CD-positive cells is an important aspect to holistically go after the autoimmune disorders. Now a little bit of preclinical data, but this is very informative preclinical data that we have generated. What was done is using blood cells coming from the lupus patient and we use 2 different donor and reconstituting mouse with human blood cells. And then we tested 2 different CARs, CD19 CAR and ALLO-329, which is the dual CD19/CD70. As expected, both products very efficiently depletes the B cells. However, when you start looking at other parameters of efficacy, such as controlling production of autoantibodies, it appears ALLO-329, in this experiment, is far superior to CD19 [along] chimeric antigen receptor. Another important thing is shown on the right lower panel, and this is not just looking at the persistence of CAR T cells in the blood, but the persistence of CAR T cells in the tissue, particularly in spleen. At the termination of this animal study, CD19 CAR has all but disappeared, whereas ALLO-329 continues to show it be present in the spleen. So ALLO-329 appears to be able to infiltrate into tissue much better than CD19, and also be able to persist much longer, which I think is a very important attribute as we think about autoimmune disorders. Now the potential opportunity here, when you think about number of patients afflicted with autoimmune disorders in rheumatology indications, neurology, here multiple sclerosis as well as myasthenia gravis, nephrology and hematology, the number of patients far exceeds the total addressable patient population with hematologic malignancy. This is a much greater market opportunity that I think is very worthwhile for us to investigate with a chimeric antigen receptor approach. I'm going to conclude my presentation with our last but also very important program, ALLO-316. This is going after solid tumor, renal cell cancer, specifically. The patient population that we have studied with ALLO-316 is renal cell cancer patients whose disease is not controlled by TKI and checkpoint inhibitor, which is the current standard of care for the treatment of renal cell cancer. What we have recently presented last year is the efficacy data coming from this study. We have seen overall response rate of 50% and confirmed response rate of 33%. And it also appears that confirmed responses are very deep and durable. Shown on the right is the disease control rate with a CD19 CAR in patients with a CD70 positive renal cell cancer. And also as a little background, the fact that ALLO-316 only works on patients with a CD70 positive renal cell cancer really tells exactly what this CAR is supposed to be doing. This is targeting CD70. We do not expect CD70 negative renal cell cancer to respond, and that's exactly what we are seeing. And the disease control rate in the CD70-positive patient, it is currently tracking close above 92%. Now, some of the translational data coming from the 316 program is equally tantalizing. We see the CAR cell expansion, which is a prerequisite to see any kind of -- having a pharmacodynamic effect, such as response. With the 316, we are able to get the cell expansion and persistence that matches up to what autologous CAR T has shown in heme malignancy. Not only that, when you look at the tissue biopsy, tumor biopsy, after the treatment, we see homing and trafficking of the CAR T cells to the tumor. And this is something that people have been asking about, whether CAR T can traffic into the tumor. And I would argue that we have answered that important question coming from this TRAVERSE study of ALLO-316. The next slide summarizes the adverse event profile of ALLO-316. Currently, it tracks and appears to be consistent with a CAR T treatment and appears to be manageable. So as we start 2025, we have a strong financial cash position that will carry us through second half of 2026 as we pursue a very important market opportunities, frontline consolidation with cema-cel, autoimmune indications with ALLO-329 and renal cell indication with ALLO-316. As for the important milestone events in this year is the first interim analysis of cema-cel program where we will determine the lymphodepletion, and advancing ALLO-329 to the clinics and generating proof-of-concept data by the year-end and updating ALLO-316 Phase Ib data mid-2025. So with that, I thank you for your attention, and I look forward to 2025 as we deliver on these key important programs throughout the year. Thank you very much.

Great. Let's begin the Q&A.

Before the Q&A, can I invite our Head of R&D, Zach Roberts, to help me respond to some of the questions, please?

Of course. So let's begin with the Q&A. I'm joined by David Chang and also Zach Roberts from Allogene. [Operator Instructions] So maybe we'll address the upcoming major milestone for the cema-cel first. How much can we -- from the public side, how much can we get a sense on just, especially on the event-free survival, right, on cema-cel at the interim read? I think, in one of your slides, you pointed out that there's [futility] and also LD selection off the back of that milestone. So how much will we be able to tell what the cema-cel benefits will be in this innovative setting?

So let's talk about, in a little bit of details of the first interim analysis, which is slated for mid-2025. So this will be in the initial phase where we are randomizing a patient 1:1:1 into 3 different arms, 2 with the cema-cel, 1 into observation. We will be looking at a predefined number of patients who have received a treatment. And we will be looking at the MRD conversion rate as a primary sort of translational endpoint for the efficacy. And the comparison will initially be done with a cema-cel treated arm versus the control arm, where we expect the most conversion to be occurring in the cema-cel treatment arm. In a way, this is akin to futility analysis. The second phase of the interim analysis comparing 2 different lymphodepletion arms to make the determination. And of course, we will be looking at the safety. But with a specific question about how much read can we have on the event-free survival endpoint, which is the primary point of the study, I would say that this is a little bit too early and the number of patients will not be sufficient to get a good read. But the MRD conversion rate is very important. And in my view, I think they will directly translate to the event-free survival end point.

Okay. Maybe just as a background behind the correlation of event-free survival to MRD conversion, right, because you're -- there's a lot to hang on the MRD conversion. And as you think about -- there's also futility in it to where you're also trying to understand whether you have power [ to ] study enough. So can you give us a sense of what data is out there that can give you a sense of the correlation of MRD conversion, especially when patients are treated with R-CHOP or Polivy plus [R-CHOP] to the event-free survival rate?

Yes. So what the -- the Kaplan-Meier curve that David showed -- by the way, thanks for the invitation up to the stage, David, and nice to see you, Brian. Happy to be here. So this Kaplan-Meier curve, as David rightly pointed out, is an aggregate of patients after treatment with frontline. So clearly, this is predictive in that case. I will say that there's also a growing abundance of data in the post-autologous CAR-T setting, both in third line, which has been published, as well as post second line, which has now been presented twice at ASH in 2023 and 2024, using this very same assay. And in all of those cases, this assay is very predictive of durable disease control, in this case looking for the likelihood of relapse post-CAR-T infusion. So we think this is a very validated biomarker, post-CAR-T now in multiple clinical settings, and therefore have selected it as a reliable biomarker to predict durable disease control in ALPHA3.

Any questions from the audience? So at ASH...

We have one.

We do, okay...

Could you share any -- you talked about your strategic investment that you've made on manufacturing and continue to make that. Are there any key milestones in '25 that you wish to talk about that's going to enhance not slipping up on any scale-up or supply issues that you worked diligently over the last few years?

Yes. I would say that the manufacturing facility is fully operational. And in fact, all the clinical trials that we are conducting now, the clinical supply is coming from Cell Forge 1, which is our manufacturing facility. If I think about the next milestone event for the manufacturing facility, that will occur when we file the BLA.

At ASH, that felt like a year ago, but at ASH just...

It was only 3 weeks ago...